GHIDOTTI v. BARBER

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the latest electronic versions available from the Michigan
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be submitted to: Reporter of Decisions, Box 30052, Lansing, MI
48909; (517) 373-1977.

This appeal raises the question whether the
custodial mother of two minor children, ages fourteen and
thirteen, whose sole source of income is means-tested public
assistance,[1] can be deemed to be voluntarily unemployed and thereby
have an income imputed to her as the basis for her child support
obligation to a noncustodial third child. The statutorily
authorized Michigan Child Support Formula Manual prohibits the
imputation of means-tested public assistance benefits as income.
While a trial court may enter an order of support that deviates
from the formula, it may not do so without setting forth in
writing or on the record why following the formula would be
unjust or inappropriate. [2] Additionally, this Court has required the trial court
to evaluate a number of factors in determining the actual ability
and likelihood of earning the imputed income. Sword v Sword,
399 Mich 367; 249 NW2d 88 (1976). The Michigan Child Support
Formula Manual also requires the evaluation of certain equitable
factors when deciding to impute income. In the instant case, the
trial court failed to comply with these requirements.
Accordingly, we reverse the judgment of the Court Appeals and
remand this case to the trial court for a new calculation of the
support order.

I

Plaintiff James Ghidotti and defendant Brenda
Barber are the parents of James Allen Ghidotti, Jr., born
November 30, 1987. The parties were never married. Judge Kingsley
of the 37th Circuit Court granted physical custody of
James Jr. to his father, the plaintiff, on May 18, 1993.

Defendant has custody of two minor daughters,
ages fourteen and thirteen, from a previous marriage. The father
of the two girls, defendant’s ex-husband, is incarcerated and
does not pay child support. At the time this case was before the
trial court, defendant and her daughters received $356 a month in
Aid to Families with Dependent Children benefits. At the same
time, plaintiff earned approximately $370 a week from employment.

Pursuant to an order from the trial court, the
friend of the court for Calhoun County conducted a child support
review of defendant’s obligation to her noncustodial son, James
Jr. The friend of the court prepared two recommendations
regarding defendant’s child support obligations. [3] The first recommendation, which was based on
defendant’s actual income, set the support level at $0.00. When
calculating the second recommendation, the friend of the court
determined that defendant did not suffer from any condition or
restriction that would preclude her from obtaining gainful
employment. Accordingly, the friend of the court deemed defendant
to be voluntarily unemployed and calculated an imputed income for
defendant equaling $170 a week. The imputed income equaled what
defendant would earn if she worked at a minimum wage job for
forty hours a week. The second recommendation, which was based on
defendant’s actual income, plus her imputed income, set
defendant’s child support obligation at $33 a week; this amount
included $22 a week for child support and $11 a week for child
care.

On May 16, 1994, the trial court heard
testimony regarding the child support review. Defendant argued
that, because she was receiving AFDC and food stamp support for
her other two children, she could not be required to pay child
support. The court disagreed and set the level of child support
at $33 a week, imputing income to defendant and adopting the
second calculation of the Friend of the Court.

Defendant appealed this ruling, but the Court
of Appeals denied leave. This Court remanded the case to the
Court of Appeals as on leave granted. 449 Mich 861 (1995). The
Court of Appeals affirmed the trial court’s award of child
support at the rate of $33 a week, holding that

the fact that a party receives an ADFC
grant is irrelevant when determining whether a parent is
voluntarily unemployed and the amount of child support
that a voluntarily unemployed noncustodial parent will
pay for the benefit of the noncustodial child. [222 Mich
App 373, 380; 564 NW2d 141 (1997).]

Defendant appealed the ruling of the Court of
Appeals, and this Court granted leave on April 1, 1998. 456 Mich
959.

II

At the time this case was decided, defendant
was a recipient of AFDC, which the federal welfare program was
called at that time. The Personal Responsibility and Work
Opportunity Reconciliation Act, Pub L 104-193, 110 Stat 2105
(codified as 42 USC 601-1788), replaced AFDC with Temporary
Assistance for Needy Families, TANF as part of the federal
welfare reform program enacted in 1996. Because the Michigan
Family Independence Agency has elected to use TANF funds as AFDC
funds were used previously, to provide cash assistance to needy
families with minor children, the analysis of defendant’s
situation remains the same.

The stated purpose of TANF can be found at 42
USC 601(a), which provides:

In general. The purpose of this part
[42 USC 601 et seq.] is to increase the
flexibility of States in operating a program designed toC

(1) provide assistance to needy
families so that children may be cared for in their own
homes or in the homes of relatives;

(2) end the dependence of needy parents
on government benefits by promoting job preparation,
work, and marriage;

(3) prevent and reduce the incidence of
out-of-wedlock pregnancies and establish annual numerical
goals for preventing and reducing the incidence of these
pregnancies; and

(4) encourage the formation and
maintenance of two-parent families.

In order to receive federal funds under the
TANF program, a state is required to "establish guidelines
for child support award amounts within the State." 42 USC
667(a). This statute also requires that

[t]here shall be a rebuttable
presumption, in any judicial or administrative proceeding
for the award of child support, that the amount of the
award which would result from the application of such
guidelines is the correct amount of child support to be
awarded. A written finding or specific finding on the
record that the application of the guidelines would be
unjust or inappropriate in a particular case, as
determined under criteria established by the State, shall
be sufficient to rebut the presumption in that case. [42
USC 667(b)(2).]

The Legislature complied with these
requirements when it enacted MCL 722.717(3); MSA 25.497(3),
stating that "the court shall order support in an amount
determined by application of the child support formula developed
by the state friend of the court bureau." [4]The statute goes on to state that the court may enter an
order of support that varies from that mandated by the
guidelines, but only if the court determines from the facts of
the case that application of the child support formula would be
unjust or inappropriate and sets forth in writing or on the
record the following:

(a) The support amount determined by
application of the child support formula.

(b) How the support order deviates from
the child support formula.

(c) The value of property or other
support awarded instead of the payment of child support,
if applicable.

(d) The reasons why application of the
child support formula would be unjust or inappropriate in
the case. [MCL 722.717(3); MSA 25.497(3).]

The Friend of the Court Bureau has written,
distributed, and frequently revised the Michigan Child Support
Formula Manual pursuant to this legislative mandate.

The relevant language of the manual
states:

Imputation is not appropriate where:

1. A payee/payer source of income is a
means tested income such as Temporary Assistance to Needy
Families (TANF), Family Independence Payments
(FIP)(formerly AFCD), Food Stamps, Supplemental Security
Income (SSI), etc. [Michigan Child Support Formula
Manual, tenth rev, 1998, p 8 (emphasis in the original).]

III

In reaching its decision in the present case,
the Court of Appeals recognized the prohibition contained in the
manual against imputation of means-tested public assistance
benefits as income. [5] However, while acknowledging that defendant had no
source of income other than AFDC and that this could not be
counted as income for the purpose of a child support calculation,
the Court of Appeals upheld the trial court’s decision to deem
defendant as voluntarily unemployed and thereby able to work:

[The court] apparently viewed
[defendant] as it should and does view all unemployed yet
employable noncustodial parents who, for one reason or
another, have no job and claim an inability to
financially support a child. [222 Mich App 377-378.]

The trial court’s decision that defendant was
employable was based on the finding of the Calhoun Friend of the
Court’s investigation that she "suffered from no condition
or restriction that would preclude her from obtaining gainful
employment." Id. at 375.

The Court of Appeals approval of imputation of
income to a parent in defendant’s situation is based on a
misunderstanding of the applicable statutes and case law.

A

According to the applicable statutes, the child
support formula "shall be based upon the needs of the child
and the actual resources of each parent." MCL
552.519(3)(a)(vi); MSA 25.176(19)(3)(a)(vi). In applying this
mandate, cases have broadened the limits of "actual
resources" to include certain payers’ unexercised ability to
pay. See, e.g., Rohloff v Rohloff, 161 Mich App 766; 411
NW2d 484 (1987) (a trial court may order child support where a
party voluntarily reduces income and the trial court concludes
the party has the ability to earn an income); Heilman v
Heilman, 95 Mich App 728; 291 NW2d 183 (1980) (a trial court
may properly take into consideration a parent’s ability to work
and earn money in setting the appropriate child support award).
However, in allowing income imputation to a payer whom the court
finds to have an unexercised ability to pay, this Court has
required specific findings by the trial court. Sword v Sword,supra (in determining a parent’s ability to pay child
support, the court must evaluate a number of factors, such as
employment history, education and skills, available work
opportunities, diligence in trying to find work, the defendant’s
personal history, assets, health and physical ability, and
availability for work); Rohloff, supra (refers to Sword
criteria for determination of ability to pay child support in
voluntary reduction of income case).

The requirement that the trial court evaluate
criteria such as those listed in Sword is essential to
ensure that any imputation of income is based on an actual
ability and likelihood of earning the imputed income. Any other
rule would be pure speculation and a clear violation of the
requirement that child support be based upon the actual resources
of the parents. MCL 552.519(3)(a)(vi); MSA 25.176 (19)(3)(a)(vi).
Moreover, the manual requires that the decision to impute income
be based on the evaluation of "among other equitable
factors," the following eight factors:

1. Prior employment experience;

2. Education level;

3. Physical and mental disabilities;

4. The presence of children of the marriage
in the party’s home and its impact on the earnings of the
parties;

5. Availability of employment in the local
geographical area;

6. The prevailing wage rates in the local
geographical area;

7. Special skills and training; or

8. Whether there is any evidence that the
party in question is able to earn the imputed income. [Manual
at 8.]

The manual also emphasizes that Aimputation is not
appropriate where . . . [a] payee/payer source of income is a
means tested income such as Temporary Assistance to Needy
Families (TANF), Family Independence Payments (FIP)(formerly
AFDC), Food Stamps, Supplemental Security Income (SSI),
etc. . . . Manual at 8.

In its decision to allow imputation of income
to defendant, despite the fact that her sole source of income was
means-tested public assistance, the trial court gave no
consideration, except as to defendant’s medical condition, to any
of the factors required by Sword or the manual. The Court
of Appeals erroneously approved the trial court’s failure to
follow the requirements established by the child support formula
for any deviation from the formula.

The Legislature has determined that Michigan
courts "shall order support in an amount determined by
application of the child support formula developed by the state
friend of the court bureau." MCL 722.717(3); MSA 25.497(3).[6] In the absence of circumstances that make a
determination "unjust or inappropriate," the court may
not deviate from the formula. Id. The formula provides
that imputation is not appropriate where the payee/payer source
of income is means-tested income. The trial court in this case
made no record of any circumstances, nor have the parties stated
any, that would lead to the conclusion that the amount of child
support as indicated by the manual is "unjust or
inappropriate."

B

The Court of Appeals, in affirming the trial
court’s award of child support in the instant case, largely
ignored the mandate of the manual and the state and federal laws
that require courts to follow the manual when setting the amount
of child support. See 222 Mich App 378-379. The Court of Appeals
noted the manual’s statement that imputation is "not
appropriate where ‘[a] payee/payer source of income is a means
tested income such as Aid for Families with Dependent Children,
General Assistance, Food Stamps, and Supplemental Security
Income." Id., p 378. The Court of Appeals then stated
that "[t]his is consistent with the child support
guidelines’ statement that means-tested sources of income ‘shouldnot be considered as income to either parent for the
purposes of determining child support.’" Id. at
378-379 (emphasis in original). However, the Court of Appeals
also found that

although at first glance the language
of MCL 400.63; MSA 16.463 and MCL 552.602(c); MSA
25.164(2)(c) may appear to protect defendant from child
support obligations because her only income is AFDC,
neither statute prohibits imputing wage income to a
voluntary unemployed parent who receives AFDC as long
as that parent is not required to satisfy the child
support order from the AFDC grant. [222 Mich App 380
(emphasis in original).]

In fact, the Court of Appeals interpretation is
not logically consistent, because imputing fictitious income to a
parent receiving AFDC would defeat the purpose of ignoring AFDC
income in support calculations.

The Court of Appeals found that "[t]he
manual contains no substantive right liberating a noncustodial
parent who receives AFDC from all child support obligations. If
this were the case, we would find statutory authorization for
this exclusion, but none exists." Id. at 379. This
argument cannot be supported. The manual may not contain this
"substantive right," id., but it unambiguously
prohibits imputation of income to a parent (custodial or
otherwise) who receives AFDC. Manual at 10-11. Furthermore, the
Legislature statutorily delegated the authority to draft the
manual to the friend of the court. [7] This
delegation was pursuant to federal mandate. [8] "An
agency’s authority to adopt rules is typically provided for in
the statute creating the agency and vesting it with certain
powers," and that "[r]ulemaking authority may also be
inferred from other statutory authority granted to an
agency." Bienenfeld, Michigan Administrative Law (2d ed), ch
4, pp 18-19. This Court has said that "what is essential to
a valid . . . Michigan ‘rule’ is: a reasonable exercise of
legislatively delegated power, pursuant to proper
procedure." [9] To say that a rule in the manual needs "statutory
authorization" in order to exist is to defeat the purpose of
the legislative delegation.

The Court of Appeals then opined that, despite
the defendant’s lack of any income other than AFDC and the fact
that such income is "absolutely inalienable" under
Michigan law, MCL 400.43(1); MSA 16.463(1), the defendant could
be assessed child support. The Court of Appeals held that
defendant would not be required to pay the assessed child support
while her sole source of income was AFDC, but the unpaid weekly
child support would accumulate in arrears. [10] 222 Mich
App 380-384. This view cannot overcome the language of 42 USC
667, MCL 722.717(3); MSA 25.497(3), and the manual. These
controlling statutes and regulations, read together (as by their
terms they must be), prohibit the imputation of income to a
parent receiving "means tested income" unless the court
determines from the facts of the case that application of the
child support formula would be unjust or inappropriate and sets
forth in writing or on the record the four pieces of information[11] required by MCL 722.717(3); MSA 25.497(3).

CONCLUSION

The relevant state and federal statutes require
the trial court, in determining the appropriate amount of child
support in a particular case, to follow the guidelines set forth
by the state agency with the authority to promulgate such
guidelines. In Michigan, that agency is the Friend of the Court
Bureau, which has published the Michigan Child Support Formula
Manual in accordance with state and federal law. The manual
clearly and unequivocally prohibits the imputation of income to a
payee or payer parent who is receiving means-tested income such
as AFDC. When a trial court deviates from this formula, it must
set forth in writing why following the formula would be
"unjust or inappropriate." This the trial court did not
do. The Court of Appeals erred in affirming the trial court’s
order.

Therefore, the decision below is reversed, and
this case is remanded for a calculation of a support order
consistent with this opinion.

[1] "Means tested public assistance" is used
throughout this opinion to refer to federal welfare benefits paid
to eligible low-income individuals or families.

[2] MCL 722.717(3); MSA 25.497(3) provides that the court
may enter an order of support that varies from that mandated by
the guidelines, but only if the court determines from the facts
of the case that application of the child support formula would
be unjust or inappropriate and sets forth in writing or on the
record all of the following:

(a) The support amount determined by
application of the child support formula.

(b) How the support order deviates from
the child support formula.

(c) The value of property or other
support awarded instead of the payment of child support,
if applicable.

(d) The reasons why application of the
child support formula would be unjust or inappropriate in
the case.

[3]Pursuant to 42 USC 667(b)(2), the State Court
Administrative Office Friend of the Court Bureau developed the
Michigan Child Support Formula Manual, which provides, in part:

Imputation of income is treating a
party as having income or resources that the party does
not actually have. This usually occurs in cases where a
party voluntarily reduces his/her income.

The determination as to the
appropriateness of imputation in a particular case is a
judicial one. In all cases in which the Friend of the
Court investigation shows voluntary reduction of income
or where there is voluntary unexercised ability to earn,
the Friend of the Court shall make two
recommendations: one is based on actual income and the
other is based on actual plus imputed income. The
recommendation should also take into account the possible
inclusion of a child care recommendation where imputation
would make that issue relevant. The recommendation shall
include the basis for imputation and the basis of the
amount imputed. [Michigan Child Support Formula Manual,
tenth rev, 1998, p 8 (emphasis in original).]

[4] This legislative mandate is also set forth in MCL
552.519; MSA 25.176(19), which creates the Friend of the Court
Bureau as a part of the State Court Administrative Office. The
friend of the court is required to "[d]evelop and recommend
guidelines for conduct, operations, and procedures of the office
and its employees," including a "formula to be used in
establishing and modifying a child support amount and health care
obligation. The formula shall be based upon the needs of the
child and the actual resources of each parent." MCL
552.519(3)(a)(vi); MSA 25.176(19)(3)(a)(vi).

[6] The same provision is included in other relevant
statutes, such as the divorce act, MCL 552.15(2); MSA 25.95 (2);
the Family Support Act, MCL 552.452(2); MSA 25.222(2); the
emancipation of minors and rights of parents act, MCL 722.3(3);
MSA 25.244(3); and the Child Custody Act, MCL 722.27 (2); MSA
25.312(7)(2).

[7] In defining the creation, powers and duties of the
Friend of Court Bureau, MCL 552.519(3)(a)(vi); MSA
25.176(19)(3)(a)(vi) provides:

(3) The bureau shall do all of the
following:

(a) Develop and recommend guidelines
for conduct, operations, and procedures of the office and
its employees, including, but not limited to, the
following:

* * *

(vi) A formula to be used in
establishing and modifying a child support amount and
health care obligation. The formula shall be based upon
the needs of the child and the actual resources of each
parent. The formula shall establish a minimum threshold
for modification of a child support amount. The formula
shall consider the child care and dependent health care
coverage costs of each parent.

Each State, as a condition for having
its State plan approved under this part [42 USC 651 et
seq.] must establish guidelines for child support
award amounts within the State. The guidelines may be
established by law or by judicial or administrative
action, and shall be reviewed at least once every 4 years
to ensure that their application results in the
determination of appropriate child support award amounts.

[10]The defendant is
now employed and paying the assessed child support. This case is
saved from mootness by the fact that substantial arrearage built
up during the period when the defendant and her family were
subsisting on AFDC alone.

(a) The support amount determined by
application of the child support formula.

(b) How the support order deviates from
the child support formula.

(c) The value of property or other
support awarded instead of the payment of child support,
if applicable.

(d) The reasons why application of the
child support formula would be unjust or inappropriate in
the case.

Dissenting Opinion

BOYLE, J. (dissenting).

The majority holds that the last provision
of subsection I [12] of the Child Support Guidelines Formula Manual
categorically precludes imputation of income to defendant
simply because she is a recipient of means-tested benefits.
The majority fails to recognize that the provision is
inconsistent with parents’ statutory obligation to support
their children. The provision also exceeds the legislatively
delegated authority of the manual, because it conflicts with
the statutory mandate that the manual, and hence an award of
child support, be based on "the actual resources"
of the parent. I would hold that the last provision of
subsection I is void, and the categorical preclusion against
imputing income to means-tested benefit recipients cannot be
given effect.

Were all this not sufficient, the Court
also imposes a Sword v Sword[13]analysis
on the inquiry, although Sword applies only in
contempt proceedings. The Court creates a nonexistent dispute
regarding whether imputation of income was appropriate as a
matter of fact, an argument long ago waived by defendant. The
record supports the finding of a voluntarily unexercised
ability to earn, and remand is unnecessary and incorrect. The
Court of Appeals should be affirmed.

I

This appeal involves whether income may be
imputed to a means-tested benefit recipient who has been found by
the trial court to have a "voluntary unexercised ability to
earn." Relevant to that inquiry is the Child Support
Guidelines Manual, subsection I, which enumerates both the
responsibilities for the friend of the court in making the
determination whether to impute income and the relevant
considerations involved. Subsection I provides in relevant part:

The determination as to the
appropriateness of imputation in a particular case is a
judicial one. In all cases in which the Friend of the
Court investigation shows voluntary reduction of income
or where there is voluntary unexercised ability to earn,
the Friend of the Court shall make two
recommendations: one is based on actual income and the
other is based on actual plus imputed income. The
recommendation should also take into account the possible
inclusion of a child care recommendation where imputation
would make that issue relevant. The recommendation shall
include the basis for imputation and the basis of the
amount imputed.

In considering a party’s unexercised
ability to earn, the Friend of the Court shall consider
among other equitable factors the following criteria:

1. Prior employment experience;

2. Educational level;

3. Physical and mental
disabilities;

4. The presence of children of the
marriage in the party’s home and its impact on the
earnings of the parties;

5. Availability of employment in
the local geographical area;

6. The prevailing wage rates in the
local geographical area;

7. Special skills and
training; or

8. Whether there is any evidence
that the party in question is able to earn the
imputed income.

This imputation provision must be
applied equally to payers and payees and to men and
women.

Imputation is not appropriate
where:

1. A payee/payer source of income is a
means tested income such as Temporary Assistance to Needy
Families (TANF), Family Independence Payments
(FIP)(formerly AFDC), Food Stamps, Supplemental Security
Income (SSI), etc.

The obligations of the friend of the court
listed in the first paragraph of subsection I are consistent with
the friend of the court’s statutory obligation "to
investigate all relevant facts" regarding child
support. MCL 552.505(1)(e); MSA 25.176(5)(1)(e) (emphasis added).
They are likewise consistent with MCL 552.517(3); MSA
25.176(17)(3) which states:

The office shall use the child support
formula developed by the bureau under section 19 in
calculating the child support award. If the office
determines from the facts of the case that application of
the child support formula would be unjust or
inappropriate, or that income should not be based on
actual income earned by the parties, the office shall
prepare a written report that includes all of the
following:

(a) The support amount, based on actual
income earned by the parties, determined by application
of the child support formula and all factual assumptions
upon which that support amount is based.

(b) An alternative support
recommendation and all factual assumptions upon which the
alternative support recommendation is based.

(c) How the alternative support
recommendation deviates from the child support formula.

(d) The reasons for the alternative
support recommendation.

(e) All evidence known to the friend of
the court that the individual is or is not able to earn
the income imputed to him or her.

Thus, under both the guidelines and the
statute, in order to impute income to a parent, the friend of the
court shall investigate all relevant facts, and, if it
finds an unexercised ability to earn an income, shall make
one recommendation on the basis of actual income and an
alternative recommendation on the basis of actual plus imputed
income. In addition, the record must disclose the factors on
which the imputation of income is based.

In this case, the friend of the court and the
trial court fully complied with these mandates. As the majority
acknowledges, the friend of the court made two recommendations to
the trial judge. The first recommendation, based only on
"actual income," was that defendant not be required to
pay any child support (because "actual income" was
zero).[14] The second recommendation, based on "imputed
income" of $170 a week at a minimum wage job, was that
defendant should pay $33 a week in support of the child who
resided with his father.[15]The friend of
the court based the imputation of income on the fact that it
could find no reason why defendant was not capable of working a
minimum wage job for forty-hours a week, and that it found
defendant’s proffered explanations for failing to gain employment
unbelievable. The factual findings of the trial court support
this conclusion. As the circuit court found:

Although Ms. Barber has a limited work
history, once recovered from her surgery, there appears
to be no physical or mental reason preventing her from
working full time. Her children are getting older; they
are in school full time; and if her one daughter had
special needs, she is not now receiving any type of
therapy. I believe Ms. Barber has the ability to work;
that there are unskilled jobs available at minimum wage
or greater; and that she has no compelling personal
and/or family needs which would keep her from obtaining
some type of employment.

Defendant does not challenge the factual basis
for the order of child support.

Notwithstanding the fact that the friend of the
court and the trial court followed the specific requirements of
the manual and of the relevant statutes in imputing income to
defendant, the majority holds that income may not be imputed
without deviating from the manual. This conclusion is
based on the last provision of subsection I quoted above, which
states:

Imputation is not appropriate
where:

1. A payee/payer source of income is a
means tested income such as Temporary Assistance to Needy
Families (TANF), Family Independence Payments
(FIP)(formerly AFDC), Food Stamps, Supplemental Security
Income (SSI), etc.

The plain reading of this provision is a
categorical preclusion against imputing income in all cases in
which the defendant is a recipient of means-tested benefits. As
the Court of Appeals noted, such a categorical preclusion
conflicts with numerous statutory provisions that must be
construed in pari materia with the manual, including MCL
722.712(a); MSA 25.492(a), MCL 552.519(3)(a)(vi); MSA 25.176
(9)(3)(a)(vi), and with MCL 722.717(3); MSA 25.497(3).

The provision of subsection I at issue is, for
example, contradictory to the statutory obligation of parents to
support their children. MCL 722.712(a); MSA 25.492(a). The
mandate of the guidelines is that parents receiving AFDC
benefits must be excused from their statutory obligation
to support their children without consideration of their
voluntarily unexercised ability to earn. Upholding such a mandate
impermissibly grants the Friend of the Court Bureau the power to
act in derogation of the statute.

Likewise, analysis of MCL 552.519(3)(a)(vi);
MSA 25.176 (9)(3)(vi) demonstrates that the Friend of the Court
Bureau has exceeded its legislatively delegated authority in
promulgating the categorical preclusion against imputing income
to means-tested benefits recipients. This statute is the
"enabling" statute that requires the friend of the
court to develop and recommend a the Child Support Formula. The
statute states that "the formula shall be based upon the
needs of the child and the actual resources of each
parent." (emphasis added). The majority acknowledges that
the term "actual resources" includes "certain
payers’ unexercised ability to pay." Slip op at 9. It fails
to perceive, however, that the practice of imputing income serves
to account for the "actual resources" of those
individuals who could presently earn an income, but who do not.
Otherwise stated, a parent’s voluntarily unexercised ability to
earn, when it exists, is among the "actual resources"
of the parent. In subsection I, the manual recognizes that the
award of child support is a judicial determination, but then, in
the provision at issue, directs the trial court to ignore
defendant’s voluntarily unexercised ability to earn when the
defendant receives means-tested benefits. It follows that in that
subset of cases in which there is a means-tested benefit
recipient, this provision directs the court to base its order of
support not on the actual resources of the parents or even
the needs of the child, but on the coincidental fact that
defendant receives public assistance. Quite simply, a provision
of the manual that requires such a result in the absence of
deviation from the manual is contrary to ‘ 519, is therefore
without legislative authority, and is void.[16] For this
reason, the categorical preclusion against imputing income to
means-tested benefit recipients cannot be given effect.

In sum, the manual states that AFDC benefits
may not be counted as "actual income." Consistent with
statutory directive, however, the manual created by the Friend of
the Court Bureau cannot preclude imputation of income on the
basis of defendant’s voluntarily unexercised ability to earn,
when that unexercised ability is among defendant’s actual
resources. As contemplated by statute, defendant’s voluntary
unexercised ability to earn is the basis for imputation of income
in this case. I would affirm the decision of the Court of Appeals
that defendant is required to pay child support because she is a
voluntarily unemployed individual, and that defendant will not be
required to pay support as long as her "sole source of
income" is AFDC, but that the amount will accrue during that
time.

II

To the extent that the majority transposes the Sword
v Sword factors, or the eight factors contained the manual[17] into the determination it requires on remand, it must
first be observed that the order before us is not an order of
contempt. In Sword, Justice Coleman was discussing
inability to pay as a defense in a civil contempt proceeding
resulting from an "order of the court resulting from a
previous trial . . . ." Id. at 382. The factors cited
by the majority were "suggest[ed as] some possible lines of
inquiry" to determine whether an individual should be held
in contempt of court for failure to comply with the terms of a
support order. Id. at 378. The initial order of support
and findings of contempt are obviously distinct. Second, the
guidelines incorporate virtually all Justice Coleman’s
suggestions as considerations in imputing income. Third, the
defendant did not assert error on the basis of inadequate ground
for imputation, and therefore has waived the issue.[18] Finally, and most significantly, MCL 552.517(3); MSA
25.176(17)(3) sets forth the factors that must be shown
supporting the judicial decision to impute income. The friend of
the court’s findings and those adopted by the trial court
satisfied these statutory requirements. The manual cannot and
does not purport to alter these requirements, because, to the
extent it would be claimed to do so, the manual conflicts with
legislative mandate.

In all events, the majority’s assertion that
the "trial court gave no consideration, except as to
defendant’s medical condition, to any of the factors required by Sword
or the manual," slip op at 11, is incomprehensible, given
the express written findings of the trial court, already noted
above:

Although Ms. Barber has a limited work
history, once recovered from her surgery, there appears
to be no physical or mental reason preventing her from
working full time. Her children are getting older; they
are in school full time; and if her one daughter had
special needs, she is not now receiving any type of
therapy. I believe Ms. Barber has the ability to work;
that there are unskilled jobs available at minimum wage
or greater; and that she has no compelling personal
and/or family needs which would keep her from obtaining
some type of employment.

The record is clear that both the friend of the
court [19] and the trial courts considered the factors in
subsection I before imputing income to defendant[20] The majority’s decision to remand this case to the
trial court for consideration of the Sword and manual
factors is thus both legally incorrect and factually unnecessary.
The error in that approach is only compounded by the final
conclusion that remand is also necessary to comply with "the
four pieces of information," slip op at 16, required by MCL
722.717(3); MSA 25.497(3). Three of the four are, by the
majority’s own view, inapplicable or satisfied. The result is
that an order of child support long ago legitimately entered will
be delayed until the trial court utters the magic words that
apply the manual is unjust and inappropriate. The statute at
issue requires only a statement of reasons to impute income, a
requirement undoubtedly met by the courts below.

1. A payee/payer source of income is a
means tested income such as Temporary Assistance to Needy
Families (TANF), Family Independence Payments (FIP)
(formerly AFDC), Food Stamps, Supplemental Security
Income (SSI), etc.

[14]In addition to satisfying the mandate of Sect. 517
and subsection I, this first recommendation also satisfies the
initial directive of the manual that requires the exclusion of
AFDC benefits from the calculation of net income (subsection G).

[15] All parties concede, and correctly so, that this second
recommendation was not based even in part on the AFDC benefits
received by defendant, nor did this recommendation require
defendant to satisfy the support obligation by the use of her
AFDC benefits. Therefore, this second recommendation also
comports with subsection G. For the same reasons, the court’s
support order in this case is consistent with MCL 400.63(1); MSA
16.463(1).

[16] The provision of subsection I at issue also conflicts
with the obligations of the friend of the court under MCL
552.505; MSA 25.176(5) and with the obligations imposed on the
friend of the court under subsection I described above. To give
effect to the provision of subsection I at issue renders these
mandatory obligations of the friend of the court completely
meaningless in the subset of cases in which the defendant
receives AFDC. Even were the friend of the court to complete its
obligations to investigate all relevant facts and to make two
separate recommendations, the trial court would be presumptively
required to ignore the factual findings of the friend of the
court because of the defendant’s AFDC recipient status.

Furthermore, it is clear that the Legislature
contemplates situations in which income may be imputed to parents
without deviating from the guidelines. MCL 552.517(3); MSA
25.176(17)(3), provides:

The office shall use the child support
formula developed by the bureau under section 19 in
calculating the child support award. If the office
determines from the facts of the case that application of
the child support formula would be unjust or
inappropriate, or that income should not be based on
actual income earned by the parties, the office shall
prepare a written report that includes all of the
following:

(a) The support amount, based on actual
income earned by the parties, determined by application
of the child support formula and all factual assumptions
upon which that support amount is based.

(b) An alternative support
recommendation and all factual assumptions upon which the
alternative support recommendation is based.

(c) How the alternative support
recommendation deviates from the child support formula.

(d) The reasons for the alternative
support recommendation.

(e) All evidence known to the friend of
the court that the individual is or is not able to earn
the income imputed to him or her. [Emphasis added.]

This statutory language clearly distinguishes
between cases in which deviation will be appropriate and cases in
which imputation of income will be appropriate. Furthermore,
there is nothing in this section that suggests that subsection 3
does not apply to cases in which a parent is receiving
means-tested benefits. To the contrary, MCL 552.517(3); MSA
25.176(17)(3) clearly contemplates that review will be had under
MCL 552.517; MSA 25.176(17) in cases in which "a child is
being supported in whole or in part by public assistance . . .
." The majority’s holding that the court’s must deviate from
the manual in order to impute income to an AFDC recipient is not
consistent with legislative intent.

[17] The eight factors listed in the manual are found in
subsection I, reproduced in relevant part at page 3. The ten
factors cited in Sword are nearly identical:

1. Employment history, including
reasons for any termination of employment.

7. Efforts made to modify the decree if
it is considered excessive under the circumstances.

8. Health and physical ability to
obtain gainful employment.

9. Availability for work (exact periods
of any hospitalization, jail time, imprisonment).

10. Location(s) of defendant since
decree and reason(s) for move(s), if there has been any
change of address. [399 Mich 378-379].

[18] At the motion hearing from which defendant appealed,
the defendant presented two arguments. The first was that federal
statutes "preempted" imputation of income to defendant.
The second was that the statutes of this state and the guidelines
preclude imputation of income. Defense counsel expressly informed
the trial court that the amount of the support order was not at
issue. He did not claim that income could be imputed only if the
trial court’s order expressly referenced the factors contained in
subsection I. Likewise, in defendant’s initial application for
leave to appeal to the Court of Appeals, defendant raised three
points of error: the two issues of law noted above, and a policy
argument regarding imputation of income to AFDC recipients.
Having failed to raise any issue in respect to the sufficiency of
the foundation for the finding of a voluntarily unexercised
ability to earn before the trial court or the Court of Appeals,
defendant has waived the issue, Arndt v Ball, 335 Mich
595, 600; 56 NW2d 394 (1953), and defendant’s two-page attempt to
reopen the record before this Court should be unavailing.

[19] The friend of the court referee also noted that
defendant had recently moved to an area that defendant contended
lacked employment opportunities. The referee found that
contention to be without merit, and also found that the reasons
for defendant’s move were contrary to the interests of her
children.

[20]Furthermore, the fact that both the friend of the court
referee and the trial court referenced some of these factors
verbatim unequivocally supports the conclusion that they were
well aware of their responsibility to consider these factors, and
that they did so.